Australian FPSO goes offline once again

Singapore-headquartered oil and gas company Jadestone Energy has temporarily shut in production from a floating production storage and offloading (FPSO) vessel operating at a field in the Timor Sea offshore Australia.

This comes after a gas alarm was triggered on 29 July 2023 within ballast water tank 4S on the FPSO Montara Venture, indicating possible communication with one of the adjacent tanks within the FPSO. With the production from the Montara fields temporarily interrupted, the company explains that key stakeholders, including the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), were notified of the incident.

According to Jadestone, tank 4S will be emptied and cleaned over the next week to permit an inspection to identify the source of the communication between tanks and allow for appropriate repairs. Following the inspection, the company plans to outline the next steps, any potential costs, and any impact on its production guidance.

Paul Blakeley, Jadestone’s President and CEO, commented: “While disappointing and frustrating to have to shut in Montara again, we will find and repair any additional defect while continuing with the overall planned programme of inspection of the storage tanks on the FPSO. The safety of our personnel, as well as the long-term integrity of the asset, are paramount. We will provide a further update once the inspection of tank 4S is complete.“

This is not the first time that the production at the field was shut in. Previously, a small oil leak from a crude oil tank on the FPSO Montara Venture led to the shutdown of production from the Montara field in July 2022. After an interim repair of the leak point in the 2C tank, Jadestone restarted production from the field while a permanent repair was being advanced.  

However, the company decided to shut in production from Montara once again, after an additional internal defect in the water ballast 4S tank was detected in August 2022 during preparations for the permanent repair of the 2C tank.

Come September 2022, Jadestone confirmed that progress was made in implementing a remediation plan for the FPSO, but was unable to provide a date for the restart of production from the Montara field until January 2023, when the firm disclosed that the restart was anticipated in February 2023.

The plot thickened further when the company revealed at the end of February 2023 that severe weather conditions delayed the restart of production from the field, which was previously expected by the end of February. The production from the FPSO Montara Venture was restarted in late March 2023.

The Jadestone-operated and owned Montara project, encompassing three separate fields – Montara, Skua and Swift/Swallow – is located in the Timor Sea offshore Australia approximately 690 kilometres west of Darwin.

Jadestone had around $118 million of consolidated cash balances (restricted and unrestricted cash) on 30 June 2023 and about $111 million of debt drawn under its reserves-based lending  (RBL) facility, resulting in a net cash position of $7.1 million. In addition, the Singapore-based player’s $35 million standby working capital facility remains undrawn.